Annual report 2004 (English) - PDF 3546K - Imperial Tobacco

Rounding out the brand portfolio
and increasing profi tability
Prior to the acquisition, Group activities in Russia were
limited to the presence of Gauloises Blondes and Gitanes
in Moscow and St. Petersburg. Altadis now intends
to exploit the potential of its Gauloises Blondes and
Fortuna fl agship brands and, given the considerable
advantage offered by Balkan Star’s broad distribution
network, the Group is targeting a signifi cant share
of the premium market.
The geographic complementarity between Balkan Star’s
and Altadis Polska’s activities, in addition, should enable
the Altadis Group to become a major player in the
Central and Eastern European cigarette market.
Moderate tax increases
In Russia, cigarette taxes have undergone regular,
but limited tax increases over the past few years.
On January 1, 2004, the specific tax was increased
by 10 rubles per 1,000 filter cigarettes and 4 rubles
per 1,000 unfiltered cigarettes. In 2005, the proportional
rate rose from 5% to 8% of the retail price, while
the specific rate rose by 5 rubles in all segments.
This change should mainly benefit the low-price
and intermediate segments.
Balkan Star key figures
• 1,400 employees
• EUR 106 million in economic sales
and EUR 21 million in EBITDA
• 31.3 billion cigarettes sold in 2004
• A fl agship brand: Balkanskaya Zvezda
• 1 modern plant, among the largest
in Russia
The transaction
At year-end 2004, Altadis acquired Balkan
Star at a cost of nearly EUR 200 million,
which was fi nanced through the Group’s
existing lines of credit.
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